Alamo Group generates record 1Q profit on tax reform, acquisitions

Alamo Group Inc. workers modify a John Deere tractor at the Seguin company’s manufacturing facility. Alamo Group reported record sales and earnings for a first quarter.

Alamo Group Inc. workers modify a John Deere tractor at the Seguin...

Seguin-based heavy equipment manufacturer Alamo Group generated record profit and revenue during the first quarter as new tax laws and acquisitions boosted results.

Profit rose almost 20 percent on $14.6 million in earnings, or $1.24 a share, in the three months ended March 31, the company said in reporting its results today. That compares with $12.2 million, or $1.05 a share, in the same period last year.

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Last year’s acquisitions of Santa Izabel Agro Industria, a Brazilian manufacturer, Old Dominion Brush Co., a Virginia-based manufacturer of brooms for street sweepers, and R.P.M. Tech, a Canadian maker of heavy duty snow removal equipment, contributed $14.7 million in sales and $700,000 in profit in the first quarter, Alamo Group reported.

Alamo Group CEO and President Ron Robinson said that its markets, “while not being robust,” continue to show signs of “incremental improvement.”

“This should benefit us throughout 2018 though it is uncertain how issues such as tariffs and geopolitical events will ultimately impact us,” he said in a statement releasing the company’s results.

Sales of its snow removal products returned to “more normal conditions” this past winter compared with recent years that had milder winters, he added.

Alamo Group had a sales backlog of almost $238 million as of March 31, a 62 percent increase from a year earlier.

“This is certainly a healthy level for us and in some areas a little too healthy as several of our units’ lead times are beginning to lengthen,” Robinson said.

Alamo Group is adding staff and outsourcing more to address demand. It also is increasing capital spending for the next few years to improve overall production capacity.

The company also named a new chairman of the board Thursday. Roderick Baty will succeed Robinson, who had been serving as interim chairman since November of 2017. Baty has served as an independent director of Alamo Group since 2011 and as chairman of the audit committee since late 2016.

The company, founded in 1969, makes and sells equipment used to maintain agricultural land and infrastructure in the Americas, Europe and Australia.